Betting on Boldness

John P. Calamos Sr. (ECON ’63, M.B.A. ’70) says that when he signed up to join the United States Air Force as an IIT student, his brother asked, “Are you crazy?”

In the late 1970s-a period marked by slow economic growth and raging inflation-when Calamos struck out on his own to start an investment firm specializing in the fledgling convertible securities market, colleagues commented, “Why in the world are you starting a business now?”

“I have always been a risk-taker,” says Calamos, founder, chairman, chief executive officer, and co-chief investment officer of Calamos Investments LLC, a $34-billion global asset management firm, many of whose funds have been among the top-ranked over the past 30 years. “I guess I don’t listen well to other people; if I think something is right to do, it’s what I’m going to do,” he admits, his words measured and spoken with a quiet confidence. “I just went my own way and made my own mistakes. I think about that a lot. If I had taken other people’s advice, would I have taken the chances that now have made me a success?”

Calamos has gained wide respect not just for taking risks but also for knowing how to manage them, a skill for which he credits his five years in the Air Force, which included a tour in Vietnam. His service began when he joined the IIT ROTC program, a decision he made because he thought he might like to fly planes. Just one course short of completing his M.B.A., Calamos received his notice to report to active duty.

“Within 12 months, I went from being a kid from Chicago’s West Side who knew only what an airplane was to flying supersonic jets in formation, at night,” he recalls in a conversation from the executive library of the sleek Calamos Investments Building in west suburban Naperville, Ill. As he points out models of various planes he has flown-a private, fun airplane called a Marchetti SF-260, an A-37 fighter jet, the supersonic T-38, Learjet, and a Citation X-that line his library’s bookshelves, he recounts that he left the service as a major with his pilot’s wings, as well as with lessons learned in leadership, camaraderie, and risk management.

“Ensure that you educate yourself about the risk, then try to think about what might go wrong and what you would do,” says Calamos, who over time dealt with such incidents as piloting a B-52 with an engine on fire. “Parallel to investing, there are so many factors influencing the outcomes; you try to quantify as many as possible. But there are still those outlier risks. You could know everything about the airplane, but if you end up flying in a thunderstorm-whoosh-it all goes away.”

Contemplating a situation and then making an informed and logical decision regarding its outcome seem second nature for Calamos, who frequently poses thought-provoking, rhetorical questions in the manner of Socrates, known for his ancient inquiry and debate methodology that stimulated critical thinking and ideation. Calamos says his introduction to such philosophers through his undergraduate coursework taught him how to really think.

“Philosophy asks, ‘What assumptions did you use here and why did you use them?’ To me, [my philosophy education] was eye-opening,” he says, noting that as a young boy growing up in the Greek Orthodox church, his global view was very narrow from a religious point of view. That all changed when he went to college and gained knowledge about the history of philosophy. While his interest in finance was triggered by his teenage discovery of Depression-era stock certificates in the basement of his parents’ home, he remains fascinated by the markets-“the pulse of how we feel”-because of their close relationship with the world at large.

An IIT trustee, Calamos, along with his wife, Mae, have committed $10 million to establish two endowed chairs at the university-to support a professor of philosophy at IIT College of Science and Letters, and to support the dean of IIT Stuart School of Business. He is also on the board of the city’s new National Hellenic Museum, which offers a rich slate of school programs acquainting children with Greek history and culture.

“Anything we could do to help motivate kids to become educated is worthwhile,” says Calamos. “In four years of college, my whole mindset changed completely.”